N.C. Supreme Court: School District Can Sue for Higher Funding

School finance can be a divisive issue. But rarely is it as divisive as was the case in Beaufort County three years ago, when the local school board sued the county commission for more money.

In an Aug. 28 decision, the N.C. Supreme Court held that under the state constitution, the school board could indeed sue the county, though it ordered a new trial as to whether the county commission was actually obligated to provide additional funding to the schools.

The Beaufort County school board requested $12,106,304 from the Beaufort County Commission in operating funds for the 2006-07 fiscal year. The commission thought the request was excessive and appropriated only $9,434,217. After attempts at mediation failed, the school board sued the county, seeking the full amount requested. A jury found that the county should have appropriated $10.2 million to the school system, and Superior Court Judge William C. Griffin Jr. ordered the county to approve that amount.

The county appealed the award, contending it violated the state constitution. The N.C. Supreme Court opted to hear the case.

Before the high court, the county commission argued that the statutory framework allowing the courts to determine the amount of school funding the county had to provide was unconstitutional and that the courts should have no role in the matter. The Supreme Court, however, was not persuaded by this argument, as the requirement that counties provide “a system of free public schools ”had been spelled out in great detail by the state.

“Since the General Assembly has so exhaustively defined its desired system, the [procedure] does no more than invite the courts to adjudicate a disputed fact: the annual cost of providing a countywide system of education under the policies chosen by the legislature and the State Board [of education],” wrote Justice Mark Martin for the high court.
Beaufort County also contended that having courts determine the funding a county must provide for education effectively eliminates a county’s discretion to provide more than the bare minimum needed.

Article IX, Section 2(2) of the N.C. Constitution provides that:

“[The] General Assembly may assign to units of local government such responsibility for the financial support of the free public schools as it may deem appropriate. The governing boards of units of local government with financial responsibility for public education may use local revenues to add to or supplement any public school or post-secondary school program.”

The Supreme Court agreed that there was a danger that a trial court could wrongly define “necessary” or “needed” and award more than the minimum amount the General Assembly had made a county responsible for funding.

“Accordingly, in order to reconcile the statute with Article IX, Section 2(2), we accord a restrictive interpretation to the terms ‘necessary’ and ‘needed,’” wrote Martin.

The county commission had not argued, however, that an improper definition of “needed” had been used at trial. Even so, a majority of the justices took the unusual step of examining whether the proper definition of “needed” had been used.

At trial, Griffin instructed the jury that “needed” means “that which is reasonable and useful and proper or conducive to the end sought.”

“Rather than conveying a restrictive definition of ‘needed,’ which is necessary to preserve the discretionary authority of county commissions under Article IX, Section 2(2), the instruction conveyed an impermissible, expansive definition of this statutory term,” wrote Martin.

“Because the instruction was in error, we must remand for a new trial.”

Justices Robin Hudson and Patricia Timmons-Goodson agreed with Martin’s analysis of the constitutional issue. But they would not have examined whether the instructions at trial were proper, as the county commission had not challenged them.

“To step in and set aside a jury verdict that has not been challenged is indeed to ‘frustrate the adversarial process’ through this decision,” wrote Hudson.

The case is Beaufort County Board of Education v. Beaufort Board of Commissioners (106PA08).

Michael Lowrey is an associate editor of Carolina Journal.